Nifty 50 (25,966) lost 0.5 per cent and Nifty Bank (59,069) lost 0.6 per cent last week. Below is the analysis of futures and options data of both indices.
Nifty 50
Nifty futures (December) (26,030) declined through last week and marked an intra-week low of 25,801 on Thursday. But it recouped some of the losses on Friday and posted a weekly loss of 0.4 per cent.
The price action shows that Nifty futures has formed a good base between 25,750 and 25,800. Also, the broader trend of Nifty is bullish.
Therefore, we expect the December futures to rally from the current level. Although 26,100 is a potential hurdle, we expect it to surpass this and rise to 27,000 in the near term.
In case the contract falls and breaches the support at 25,750, it can open the door for a deeper decline, possibly to 25,600.
As the December futures dropped last week, the open interest decreased from 163 lakh contracts to 154 lakh contracts. While this indicates long unwinding, given that the support at 25,750 remains valid, this need not be looked at from a bearish perspective.
That said, supporting the positive bias, the Put Call Ratio (PCR) of weekly (1.13) and monthly (1.07) options on Nifty are greater than 1. This is because of relatively greater number of put options selling.
Overall, Nifty futures retain the bullish inclination despite a decline in the last week.
Strategy: We suggested buying Nifty futures (December) at 26,145 last week. Retain this trade with a stop-loss at 25,750. When the contract touches 26,500, alter the stop-loss to 26,100. On a rally to 26,800, revise the stop-loss to 26,500. Exit at 27,000.
Alternatively, one can buy a 26000-call option (₹158.85). Go long at ₹150. Target and stop-loss can be ₹400 and ₹65. After initiating the trade, when premium rises to ₹300, raise the stop-loss to ₹200.
Nifty Bank
Nifty Bank futures (December) (59,231) was down 0.7 per cent last week. While it made a low of 58,913 on Thursday, it recovered a little on Friday.
The support band of 59,000-59,150 arrested the decline. The 50-day moving average coincides at these levels, making it a key support.
Since the base holds well and that the broader trend is bullish, Nifty Bank futures is likely to resume the rally soon. It can potentially appreciate to 62,000 in the short term.
On the other hand, if the contract falls and invalidates the support at 59,000, it can turn the near-term outlook weak. In this case, Nifty Bank futures might see a swift fall to 58,250, the nearest support. Subsequent support is at 58,000.
While the December futures fell, there was not much change in open interest. But the PCR of December month options stood at 0.75. A ratio less than 1 is because of a greater number of call option selling, a bearish sign.
Although the derivatives data indicate some weakness, the chart of Nifty Bank futures (December) shows that support at 59,000 is still in play. Until 59,000 holds, bears cannot dominate.
Strategy: We had suggested buying Nifty Bank futures (December) at an average price of 59,784. Hold on to this trade and maintain stop-loss at 58,800.
When the contract touches 60,800, revise the stop-loss to 60,000. On a rally to 61,500, tighten the stop-loss further to 61,000. Book profits at 62,000.
Instead of futures, traders can consider 59000-call (₹504.80). Buy at ₹500 with a stop-loss at ₹350. When price goes up to ₹750, revise the stop-loss to ₹600. Exit at ₹900.
Published on December 20, 2025
